PPG Industries (NYSE─PPG), one of our U.S. Key stocks, earned record profits in 2014. It’s expected to earn more this year and next. The world’s leading coatings and specialty-materials company invested in an acquisition to grow the business. It also rewarded its shareholders by raising its dividend again and buying back its shares. PPG remains a buy for long-term share price gains and modest, but rising, dividends.

In 2014, PPG earned adjusted net income from continuing operations of $1.364 billion, or $9.75 a share (all figures in U.S. dollars). This was up by over 27 per cent from $1.114 billion, or $7.67 a share, the year before. Earnings per share rose more than total earnings. That’s because the company spent $750 million in 2014 to buy back 3.8 million shares.

PPG invested $2.5 billion in acquisitions. These should add to its sales and profits–especially Comex, which PPG acquired in the fourth quarter. While the high U.S. dollar makes foreign acquisitions more affordable, it also reduces the value of the foreign results. The acquisitions supplemented PPG’s capital spending of $585 million. It plans to continue to focus on new product development.

Given its profits, PPG raised its dividend by 10 per cent, to $2.68 a share. It has now increased its dividend for 43 years in a row. The thing is, the shares have gone up so much that the dividend yields less than 1.2 per cent. We expect the company to keep raising the dividend. It spent $360 million on dividends last year. With cash and investments of $1.183 billion, PPG can afford to increase your dividends. It’ll want to keep its excellent record intact.

One positive aspect about PPG is that it’s diversified. Its customers operate in the transportation, industrial, consumer products and construction markets. So weakness in any one market will have a limited impact on the company’s results. It also operates in nearly 70 countries worldwide.

PPG is now expected to earn a higher $11.51 cents a share this year. Next year its earnings are expected to climb to $12.96 cents a share. Depending on how its acquisitions do, the company’s estimates may rise. Based on this year’s estimate, the shares trade at a forward price-to-earnings ratio of about 20 times. That’s high, but justified by PPG’s growing earnings.